Macklin v. Deutsche Bank Nat'l Trust Co. (In re Macklin)
| Decision Date | 16 February 2012 |
| Docket Number | Docket Control No. RAB-4,Case No. 10-44610-E-7,Adv. Pro. No. 11-2024 |
| Parties | In re JAMES L. MACKLIN, Debtor(s). JAMES L. MACKLIN, Plaintiff(s), v. DEUTSCHE BANK NATIONAL TRUST CO., AS INDENTURE TRUSTEE FOR THE ACCREDITED MORTGAGE LOAN TRUST 2006-2 ASSET-BACKED NOTES, et al., Defendant(s). |
| Court | U.S. Bankruptcy Court — Eastern District of California |
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NOT FOR PUBLICATION
This memorandum decision is not approved for publication and may not be cited except when relevant under the doctrine of law of the case or the rules of claim preclusion or issue preclusion.
This Adversary Proceeding was commenced by James Macklin ("Macklin") on January 13, 2011. Deutsche Bank National Trust Company, as Indentured Trustee for the Accredited Mortgage Loan Trust 2006-2 Asset-Backed Notes ("DBNTC"), seeks to dismiss the First Amended Complaint in this Adversary Proceeding pursuant to Federal Rule of Civil Procedure 12(b)(6) as made applicable to this adversary proceeding by Federal Rule of Bankruptcy Procedure 7012.The court previously granted a motion filed by DBNTC to dismiss the Original Complaint, with leave to amend granted to Macklin. On June 17, 2011, Macklin filed his First Amended Complaint ("FAC"), Dckt. 120) which is the subject of the present Motion to Dismiss.
MACKLIN'S BANKRUPTCY CASE1
Macklin commenced a Chapter 13 case on September 16, 2010.2On Schedule A, Macklin listed one real property asset, described only as "Three Bedroom-Two Bath Single Family Residence." He stated that the current value of this unidentified property was "unknown" and the amount of the secured claim was $0.00.3 On Schedule D, Macklin lists DBNTC as having a disputed, unliquidated claim in the amount of $532,000.00, all of which was stated to be unsecured. No value is given for the collateral and Macklin did not identify the property which secures the claim or the value of such property.4 Macklin filed the Chapter 13 case in pro se.
On September 30, 2011, Macklin filed an election to convert his case to one under Chapter 7 and filed several Amended Schedules, several Original Schedules, and his Statement of Financial Affairs in the bankruptcy case. For the conversion and pleadings filed from and after September 30, 2010, Macklin wasrepresented by counsel.5 These new pleadings include the following.
On Amended Schedule A, Macklin affirmatively states "none" as to having any interest in real property, removing any reference to the "Three Bedroom-Two Bath Single Family Residence" previously listed. On Schedule B, Macklin lists no personal property claims or causes of action of any kind (including any against DBNTC). No exemption is claimed in any real property or any claims against DBNTC on Amended Schedule C.
Three creditors are listed on Amended Schedule D and eight creditors are listed on Schedule F; DBNTC is not amoung them. Schedule I lists Macklin as having income of $2,200.00 per month (having been employed one month) and being divorced. Schedule J filed by the Debtor lists monthly expenses of $6,452.60 per month, including a mortgage payment of $2,230.00 per month, notwithstanding no real property listed on Amended Schedule A or real property secured claim listed on Amended Schedule D. Id.
In response to Question 1 of the Statement of Financial Affairs, Macklin lists gross income of $17,600.00 in 2010 year to date (average of $2,200.00 per month for January through August 2010), $15,000.00 (average of $1,250.00 per month) in 2009, and $25,000.00 (average of $2,000.00 per month) in 2008.6 No other income is stated on the Statement of Financial Affairs. In response to Question 5, Macklin states that property known as 10040 Wise Road, Auburn, California, was foreclosed on by Select Portfolio Servicing on December 14, 2009.
On November 17, 2010, Macklin again amended his Schedules.7On the Second Amended Schedule A, Macklin listed an ownership interest of unstated nature in real property commonly know as 10040 Wise Road, Auburn, California (the "Property"), with a value of $659,000.00 and subject to $0.00 in secured claims. Amended Schedule B lists a new asset, the District Court action Macklin v. Select Portfolio Servicing, E.D. Cal. Case No. 2:10-cv-1097, for an unstated value.8 Second Amended Schedule C claims a homestead exemption in the Property and no exemption in the lawsuit or any claims relating to the lawsuit. Amended Schedule F lists Select Portfolio Servicing as having a disputed claim for $0.00 based on a line of credit as "Alleged Creditor on 1st Mortgage." The Amended Statement of Financial Affairs lists the District Court lawsuit, identified as breach of "contract, fraud, foreclosure."
Though not having stated an exemption for any of the rights or causes of action in the District Court action (or otherwise scheduled whatever rights or causes of action he asserted against DBNTC), Macklin commenced the present Adversary Proceeding on January 13, 2011. The Chapter 7 Trustee was not a party to this action, nor were the rights or causes of action (property of the bankruptcy estate) abandoned or transferred by the Chapter 7 Trustee to Macklin.
FACTS AS ALLEGED IN THIS ADVERSARY PROCEEDING
Macklin refinanced his home in April 2006 and executed a Note naming Accredited Home Lenders, Inc. as the payee and a Deed of Trust against the Property to secure the Note. It is alleged that subsequently the Note was transferred to unidentified parties and then eventually transferred to DBNTC. Several documents relating to changing the trustee under the Deed of Trust were recorded, with the beneficial interest in the deed of trust ultimately appearing in the records as transferred to DBNTC. The transfers are summarized as follows:
+-----------------------------------------------------------------------------+
¦Document ¦Grantor ¦Grantee/ ¦Executed Date ¦Recorded¦
¦ ¦ ¦New Trustee¦ ¦Date ¦
+-------------------+---------------+-----------+--------------------+--------¦
¦ ¦MERS, Inc., ¦ ¦ ¦ ¦
¦ ¦ ¦Windsor ¦Jan. 30, 2008 ¦ ¦
¦Substitution of ¦as nominee for ¦Management ¦(Notarized Mar. 4, ¦Mar. 10,¦
¦Trustee ¦ ¦ ¦200 9) ¦200 9 ¦
¦ ¦Accredited Home¦Co. ¦ ¦ ¦
¦ ¦Lenders Inc. ¦ ¦ ¦ ¦
+-------------------+---------------+-----------+--------------------+--------¦
¦ ¦ ¦Quality ¦ ¦ ¦
¦ ¦ ¦Loan ¦ ¦ ¦
¦Substitution of ¦DBNTC ¦ ¦Aug. 21, 2009 ¦Nov. 25,¦
¦Trustee ¦ ¦Service ¦ ¦200 9 ¦
¦ ¦ ¦ ¦ ¦ ¦
¦ ¦ ¦Corporation¦ ¦ ¦
+-------------------+---------------+-----------+--------------------+--------¦
¦ ¦MERS, Inc., ¦ ¦ ¦ ¦
¦Corporate ¦ ¦ ¦ ¦ ¦
¦Assignment of Deed ¦as nominee for ¦DBNTC ¦Nov. 17, 2009 ¦Nov. 30,¦
¦of Trust ¦ ¦ ¦ ¦200 9 ¦
¦ ¦Accredited Home¦ ¦ ¦ ¦
¦ ¦Lenders Inc. ¦ ¦ ¦ ¦
+-----------------------------------------------------------------------------+
Macklin stopped making payments on the loan in 2008. DBNTC commenced nonjudicial foreclosure proceedings and eventually obtained a trustee's deed for the Property at a nonjudicial foreclosure sale held on December 14, 2009, and then recorded the trustee's deed. In January 2010, DBNTC posted a notice to vacate and later commenced an unlawful detainer action in the California Superior Court.
Macklin filed for bankruptcy protection pursuant to Chapter 13 of the Bankruptcy Code on September 16, 2010. The bankruptcy case was subsequently converted to a proceeding under Chapter 7. DBNTC sought relief from the automatic stay provided by 11 U.S.C. § 362(a). After two hearings and permitting Macklin to offer supplemental arguments and evidence in opposition, the court granted relief from the automatic stay by an order entered on February 4, 2011.9 The 14-day stay of enforcement provided by Federal Rule of Bankruptcy Procedure 4001(a)(3) expired on Friday, February 18, 2011.
PROSECUTION OF ADVERSARY PROCEEDING
Macklin filed this adversary proceeding on January 13, 2011. The initial complaint sought (1) to determine the nature, extent, and validity of any lien held by DBNTC, (2) to determine that theunderlying note has been satisfied or converted to unsecured debt, (3) damages for DBNTC's purported violation of the Truth-in-Lending Act by failing to notify Macklin that it obtained an interest in the mortgage loan, (4) a declaration that the assignments of the trust deeds were a fraudulent conveyance, (5) damages for libel, and (6) to quiet title to the Property. Macklin prays for $1 million in general damages, $750,000.00 special damages, punitive damages, attorneys' fees and costs, an order quieting title in the property in his favor, and other just relief. On April 7, 2011, DBNTC filed a Motion to Dismiss.10 The court granted the Motion to Dismiss by order entered on May 20, 2011, with leave to amend.11 Macklin then filed the FAC on June 17, 2011.12 The FAC asserts ten causes of action: (1) Violations of the Truth-in-Lending Act; (2) Violations of the Real Estate Settlement Procedures Act; (3) Violation of the Fair Credit Report Act; (4) Fraud; (5) Unjust Enrichment; (6) Violation...
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